The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act ("BAPCPA") amendments to the Bankruptcy Code changed Section 303(b)(1) to require that petitioning creditors' claims cannot be subject to a bona fide dispute "as to liability or amount'.' This change has prompted courts to question the eligibility of petitioning creditors whose claims are partially disputed and has led to conflicting court rulings, Some courts have concluded that BAPCPA substantively changed Section 303(b)(1) such that any partially disputed claim should be considered subject to a bona fide dispute regardless of how small the disputed portion of the claim.
It is worth noting that a bankruptcy court's decision not to grant relief on an involuntary petition poses great risks for petitioning creditors, When the petitioning creditors have satisfied all of Section 303's requirements, the court will enter an order for relief on their involuntary bankruptcy petition.
But suffragettes never entirely abandoned petitioning. In May 1914 Emmeline Pankhurst was arrested on her way to presenting a petition to the king, generating one of the iconic suffrage images.
For Irish suffragists, petitioning allowed them to challenge the British Parliament as well as supporting the wider campaign.
When a debtor successfully contests and obtains dismissal of an involuntary bankruptcy petition, the debtor can assert a broad range of damage claims against the petitioning creditors.
Blixseth argued that the petitioning creditors did not satisfy the requirements of Bankruptcy Code section 303(b)(1) because three creditors with non-contingent undisputed unsecured claims, totaling at least the minimum statutory threshold of $14,425 on the Petition Date, did not join the involuntary petition.
One practical way to empower citizens is by strengthening our longstanding petitioning process.
Tabled in Parliament on February 13, 2013 by New Democrat MP Kennedy Stewart, Motion 428 proposes to modernize and improve Canada's antiquated petitioning system.
50 Thomas Patton Drive, LLC (the "Fustolo Case"), had to determine whether one of the
petitioning creditors was eligible to join an involuntary petition where its claim was based on a judgment, the amount of which was unquestionably incorrect, and which was subject to an unstayed appeal.
Need I add that I personally am still in favour of ensuring that a response be given to citizens who take the trouble of
petitioning their elected representatives?
Although not discussed in detail in the decision, a dismissal of an involuntary petition, particularly on bad faith grounds, can result in significant damage claims against the
petitioning creditors.
However, the Eleventh Circuit's holding serves as a warning to
petitioning creditors that seek to appeal a bankruptcy court's dismissal of their involuntary bankruptcy petition.
The court disqualified the
petitioning creditor because its claim was subject to bona fide dispute as to liability and amount.
Petitioning creditors seeking relief on an involuntary bankruptcy petition have to prove, among other things, that their claims are not subject to bona fide dispute as to liability or amount.
There are a number of criteria that
petitioning creditors must meet for a valid involuntary bankruptcy filing: The
petitioning creditors' unsecured claims total $10,000; the
petitioning creditor's claim may not be subject to a bona fide dispute nor contingent; the debtor is generally failing to pay its non-disputed debts as they come due; and, if the debtor has 12 or more creditors, at least three creditors must join in the petition.